Wednesday, 5 September 2012

Mike Maloney in Horrible Car Crash with Tesla - & is alive & well

Part 1.   The Car Crash
Part 2.  The Economic Crash
Part 3.  The Cars
Part 4.  Freedom and the Pursuit of Excellence

The Economic Crash

I always say that in every disaster lies an opportunity.  What coming this close to death has done for me is to remind me to enjoy my life.  To always do my best, and enjoy what I’m doing.  
Back in 2002, when I began this journey into economics, when gold was under $400 and silver was under $5, I knew I had an understanding of what was happening in our society.  And I knew I wanted to use that understanding to help others. Seeing the crazy things governments and central banks around the world were doing to their economies, I started sharing what I had learned and encouraging people to do their own research, decide what they should do, and take action. Now that gold is over $1,600 and silver is over $30, I can honestly say that I feel both rewarded and privileged to have played a positive part in helping to protect many, many people from government stupidity.  
But it’s not over yet.  I believe the biggest economic crash in history is still coming at us, and is just around the next bend in the road.  For years I have been getting ready for this economic disaster by investing every spare dollar into gold and silver.  And even though I’m the guy that sees this economic crash ahead as the greatest opportunity in history, and even though my gold and silver makes me feel safer and sleep more soundly, I still worry.
From a monetary historian’s point of view there is no example, in all of history, of the type of monetary malfeasance currently being committed by governments and central banks turning out well.  In fact, it always leads to disaster… and this time they are doing it globally!  
Historically, when a crisis wipes out a society’s middle class, there is very often a great political change in that country, and it is always for the worse. As goes the middle class, so goes the nation.  The middle class is approximately 60%-70% of a nation’s population.  They define a country with their vote and when they are scared, and threatened with the possibility of a life in poverty, they will vote for anybody.  Usually they will vote for a strong, charismatic leader who will play on their fears and promise them a way out of their predicament.   In fact, you can trace the rise of Napoleon, Hitler, and Mao directly to currency crisis and a loss of the middle class.   
Today, worldwide, we have the largest middle class in history.  In the U.S., and in many other countries around the world, the generations born after WWII are spoiled… they have never gone hungry… they have never known real economic strife.  Most of them believe they deserve something just because they are alive.  This creates a dangerous situation.  When you take away a spoiled brat’s toys he throws a tantrum.
For the last 30 years governments and this spoiled middle class have both been rewarded for taking on ever-increasing mountains of debt.  Like rats learning a maze, debt-dependence is a conditioned response, brought on by a series of rewards and punishments.  Artificially low interest rates, which have been lower than the real rate of inflation, have punished savers and rewarded borrowers.  
Today’s unsustainable debt and currency crisis is entirely caused by central banks meddling with the economy.  To understand how central banks artificially goose the economy we need to look at how currency is created.
Whenever a central bank writes a check it creates a type of currency they call “base money” (paper currency).  The reason currency is created every time a central bank writes a check is because the check was drawn on an account that always has a zero balance.  Basically they are committing a fraud and counterfeiting.  These brand new units of currency inflate and dilute the currency supply when they enter circulation causing the purchasing power of that currency to fall.  With each new unit of currency created, each existing unit of currency has less purchasing power.  The symptom of this inflation and dilution of the currency supply is rising prices.

The recent crash of my Tesla Roadster and the global economic crash that lies ahead of us have some similarities.  Surviving the impact of a collision is all about the dissipation of energy.  By allowing the body of my Tesla to absorb energy by crumpling and disintegrating it cushions the impact, while the strong and rigid passenger compartment maintained its integrity and allowed nothing to intrude, saving my life.  

The biggest crash the world has ever seen is happening right now.  The financial vehicle I have chosen to carry me safely through it is gold and silver.

1 comment:

  1. eToro is the most recommended forex trading platform for rookie and advanced traders.